Council Meeting: September 10, 2002 Santa Monica, California
TO: Mayor and City Council
FROM: City Staff
SUBJECT: Authorize the
City Manager to Negotiate and Execute two Contracts with the Metropolitan Water District of Southern California to
Establish New Rebate Programs for Water Efficient Devices
This report recommends that City Council authorize the City Manager to negotiate and execute two contracts with the Metropolitan Water District of Southern California (MWD) to establish two new rebate programs, the Commercial, Industrial and Institutional (CII) Regional Rebate Program and the Residential High Efficiency Clothes Washer Rebate Program (HECW), from July 1, 2002 through June 30, 2003 with an option to renew for FY03-04. The proposed Plan is an integral component of the Santa Monica Sustainable City Program.
BACKGROUND
The City of Santa Monica has identified
sustainability as a principle community priority. Many departments within the City have included considerations of
sustainability in their decisions and operations to become more environmentally
conscious, cost effective and efficient.
In 1994, the City formalized its commitment to
sustainability by adopting and implementing the Sustainable City Program (SCP),
which establishes a broad spectrum of goals, targets and indicators for City
operations and the community at large, including:
-
Reducing resource
consumption
-
Reducing waste and
pollution generation
-
Safeguarding
environmental resources
-
Safeguarding public
health
-
Maintaining a healthy
and diverse economy and improving the livability of the community and quality
of life for residents and visitors
This staff report addresses resource consumption and
conservation with the goal of reducing water consumption in the community.
Southern California enjoys a Mediterranean climate
that cannot provide sufficient water supplies to satisfy demand without
importing water. In recognition of the
relative unsustainability of a system that extracts water from one region and
transports it a long distance to supply another region, the City has undertaken
several initiatives over the years to become more self-sufficient and
sustainable.
For the past fifteen years, the City has invested in
the development of local and renewable groundwater resources for the
community. These activities increased
the contribution of local water supplies to account for almost 80% of the
community’s water needs in 1995.
Additionally, in response to periodic and severe droughts, the City
adopted stringent water conservation ordinances, codes and programs beginning
in 1989 to encourage the installation of water efficient devices. These efforts included the Retrofit Upon
Sale and No-Water-Waste Ordinances, the Bay Saver Program and Plumbing Code
requirements for new construction. The
City also constructed the Santa Monica Urban Runoff Recycling Facility (SMURRF)
to capture, treat and reuse urban runoff, thereby reducing demand (3-4%) for
potable water. Throughout the latter
half of the 1990’s, City programs to encourage water conservation remained
static, as resources were diverted to other critical conservation programs,
such as energy efficiency.
Interestingly, significant energy efficiency impacts are associated with
the more efficient use of water.
These strategies have been effective, although their
contribution to the community’s sustainability efforts has been compromised by
unanticipated conditions. In 1996, MTBE
was discovered in numerous City water production wells, rendering the
underlying aquifers unusable until the contamination is removed. Hence, rather than further development of
local groundwater supplies, the City now imports approximately 80% of its water
from the MWD. The community’s attention
to and engagement in water conservation has diminished since the focused
efforts associated with the 1992 drought, and water use has increased
annually. The expansion of commercial
and residential development associated with the economic boom of the 1990’s has
also increased daily demand. Though
demand has increased, reduction in water supply is a reoccurring problem. In 2001-02, Southern California experienced
the driest winter in recorded history.
The goal originally set by the City Council and the
SCP was a 20% reduction from the 1990 usage volume of 14.3 million gallons per
day (MGD) to 11.4 MGD by the year 2000.
Although the community achieved a 16% reduction in water usage in 1993,
the above noted conditions have combined to increase usage annually from a low
of 12 MGD in 1993 to 13.4 MGD in 2000.
The usage in 2000 represents a reduction of 6% from 1990, which falls
short of the goal of 20% reduction.
Base funding for the two programs in which contracts
are requested comes from water rate payers.
Consequently, an important basis for the recommendation of each of these
programs is that the cost of implementation shall not exceed the cost of water
that the program will save. Currently,
the cost of water from the MWD is $431 per acre-foot (AF), while the average
cost of the two new programs is $145 per AF.
The proposed programs can be partially funded by rebates and financial
support from outside agencies, such as Southern California Edison, the MWD and
the U. S. Bureau of Reclamation.
This
report requests the execution of two agreements with MWD to assist in the
funding of the City’s two new water conservation programs. The two contracts will implement four new
water conservation strategies:
Commercial, Industrial and Institutional (CII) Bay Saver, Restaurant
Retrofits, and Residential and Commercial HECWs. These new rebate incentive programs will provide ratepayers with
new and permanent means of reducing their utility costs and reduce the City’s
total water usage toward the 20% goal. The CII rebate
program, including Restaurant Retrofits, has no limit on time nor the MWD
credits back to the City, which vary from $90-500 per water device, depending
upon the type of water device retrofitted.
The Residential HECW rebate program has a limited number of MWD rebates,
10,000, to be shared by 26 water agencies, first come, first served. Each MWD rebate is $35 per HECW. After this initial period, the City can
continue to offer its own rebates.
BUDGET/FINANCIAL IMPACT
The fiscal impact of implementation of four new water conservation strategies recommended by the Plan is the one-time expenditure of $211,790, which is in the existing FY02-03 EPD Bay Saver budget line item, account 31662.544390. Over a ten-year period (estimated life of new water devices), the value of the avoided water usage, 1,224 acre-feet, is $527,544, assuming the MWD price remains at $431 per acre-foot.
RECOMMENDATIONS
City staff recommends that the City Council authorize
the City Manager to negotiate and execute two contracts with the Metropolitan
Water District of Southern California to establish new rebate programs for
water efficient devices from July 1, 2002 through June 30, 2003 with an option
for a second year, FY03-05.
Prepared
by: Craig
Perkins, Director, EPWM
Brian Johnson,
Manager, Environmental Programs Division